Top Republican Lawmakers Shift Priorities To Overhauling Tax Code

Republicans are feeling pressure to deliver the first overhaul of the federal tax code in more than 30 years after the bruising collapse of long-promised health care legislation to dismantle the Affordable Care Act.

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AUDIE CORNISH, HOST:

The White House says the fight over health care is not over, but on Capitol Hill, congressional Republicans are ready to move on. Top lawmakers are shifting their priorities to the next major legislative debate - overhauling the federal tax code. NPR congressional correspondent Susan Davis joins us now from the Capitol. And Susan, how confident are Republicans that they can actually deliver on tax legislation, especially after their efforts on health care basically collapsed?

SUSAN DAVIS, BYLINE: Well, Republicans are certainly more hopeful that a tax bill will be easier. Republicans I talked to believe that failing on health care has only served to drive up the pressure on the party to deliver on tax legislation, the issue which has historically been a little bit more of a policy sweet spot for the Republican Party than health care.

It didn't get as much attention last week, Audie, but at the same time the health care bill was collapsing, Republican negotiators were announcing that they had a broad outline of the tax reform legislation they'd like to see. Those negotiators are what is being called the Big Six, and that's Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Congressman Kevin Brady of Texas, Senator Orrin Hatch of Utah and, for the Trump administration, Treasury Secretary Steve Mnuchin and economic adviser Gary Cohn.

CORNISH: Those are the players. Give us an overview of the policy. What are the biggest things Republicans actually want to accomplish with this tax overhaul?

DAVIS: Texas Congressman Kevin Brady says the goal is, in his words, the lowest rates possible. Republicans want to simplify the code and lower rates on both the individual side of the tax code and the business side. Some of the broad-brush proposals on the table include reducing the number of personal income brackets from seven down to three. And President Trump has indicated he'd like to see a corporate tax rate as low as 15 percent, down from the current 35 percent rate of today.

The big questions about what those exact rates will be, how these tax cuts will be paid for. And what process Republicans will want to use to pass these bills through Congress are things we just don't know the answer to yet. Republicans say they plan to reveal more soon. Audie, I also think it's important to stress that this will not be easy. The last time there was a federal tax overhaul of this scale was 31 years ago in nineteen hundred - 1986 under President Reagan, and that was a bipartisan bill.

CORNISH: Any chance that this one would be bipartisan?

DAVIS: Many Democrats believe Republicans have to work with them if they want to get a bill done. I spoke to one of them, Virginia Senator Mark Warner, today. He's been working on tax issues for a long time, and this is what he said.

MARK WARNER: The question will be, are they going to repeat the mistake of health care where they said they want to try to do tax reform just with Republicans? If they use reconciliation, they're not going to have a very easy path. If they think health care is hard, they have not seen anything in terms of how you deal with the complexity of tax reform.

DAVIS: Now, Warner was 1 of 45 Democrats who sent a letter today to Mitch McConnell outlining their conditions on tax reform. That is, Democrats say they won't support any bill that cuts taxes for the top 1 percent of Americans and any bill that cuts to - makes - has - excuse me - makes cuts to entitlement programs like Medicare in order to pay for them. Mitch McConnell in response to that letter said Republicans will then likely use that reconciliation process that Warner referred to because it will allow Republicans to cut Democrats out of those negotiations. This of course was the same process tried and - used and tried and failed to use in health care. It didn't work then. Who knows if it will work next time?

CORNISH: In the meantime, they've actually set a deadline, right?

DAVIS: Yeah. So they have outlined an ambitious and very aggressive timeline in Washington time. Staff is working now on draft legislation. House and Senate lawmakers say they hope to release that draft legislation in September and send it through the committee process. That would require the House to vote in October, the Senate to vote in November to get a bill to President Trump by the Thanksgiving outline that they have called for. It is absolutely possible to be done. But if past behavior is the best predictor of future outcomes, Republicans have a very tough four months ahead of them.

CORNISH: NPR's Susan Davis speaking with us from the Capitol. Thank you, Sue.